29
First
rank:
The
wealth
of
Pension
Fund
exceeds
both
actuarial
obligation
and
solvability obligation.
Second rank: The wealth of Pension Fund is less then the actuarial obligation and
exceed the solvability obligation
Third
rank:
The
wealth
of
pension
fund
for
funding
is
less
than
the
solvability
obligation.
2.3.4 Cash-Flow Analysis
The statement of cash flows provides information on cash inflows and outflows for a
period.
To
predict
cash
flows
in
the
future
analyst
could
use
the
historical
cash
flow.
Cash
flow
reporting
distinguishes
the
sources and
uses
of
cash
flows
into
operating,
investing, and financing activities. Financing activities includes of contribution
collection and pension benefit payment.
In evaluating sources and uses of cash, the analyst should focus on question like (Wild,
Subramanyan, and Halsey, 2004 p.395):
Are asset replacements financed from internal or external funds?
What are the financing sources of expansion and business acquisitions?
Is the company dependent on external financing?
What are the company’s investing demands and opportunities?
What are the requirements and types of financing?
Are managerial policies (such as dividends) highly sensitive to cash
flow?
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